City wins lawsuit over sewer lift upgrade

A United States District Court judge recently dismissed a lawsuit against the city of Oak Harbor in a summary judgement decision, effectively ending a long-standing dispute over a sewer lift station.

But it’s been an expensive and time-consuming case for the city. City Attorney Phil Bleyhl said defending the city has cost about $80,000 in legal fees from the firm Keating, Beckling and McCormick. On top of that, the city’s insurance company hired its own attorney and Bleyhl spent many hours on the case.

Bleyhl said the attorneys are discussing the possibility of recouping some of the costs from the plaintiffs.

Brent and Denise Morrow, owners of a mini-storage business in Oak Harbor, filed a lawsuit against the city and certain city officials last year, claiming violations of due process rights, the state Consumer Protection Act, state law, as well as fraud, tortious interference with business expectancy and negligent misrepresentation.

In addition, the lawsuit alleged that the city violated the Racketeer Influenced and Corrupt Organizations Act, the so-called RICO law that was designed to fight organized crime.

According to the lawsuit, the Morrows’ mini-storage project was delayed by 10 months over an issue of whether the owners needed to pay for an upgrade to the city sewer system. The city argued that the Morrows were required to upgrade a sewer lift station when they hooked into it.

A sewer lift station allows sewage to flow against gravity. Under the city code, a developer has to pay for a project’s impact on city services or facilities. That can mean, for example, that a developer must pay for a left-turn lane on an access road because of added traffic.

It turned out, however, that the city had a 1989 letter stating that the Morrows’ property was entitled to hook into the sewer lift station as it existed. The city eventually dropped the demand for a lift station.

Last May, a United States District judge dismissed all but three of the Morrows’ claims against the city. On Dec. 17, U.S. District Judge Thomas Zilly dismissed the remaining three in a summary judgement.

In his order, Zilly basically writes that the Morrows’ three claims are dismissed for “failure to exhaust administrative remedies.” Under case law, a governmental action cannot be challenged in court unless the plaintiff has exhausted all administrative remedies. In other words, there are actions the Morrows could have taken administratively — like appealing to the city council — before filing a lawsuit.

According to Bleyhl, the Morrows have 30 days to appeal the decision. Otherwise, the case is over.

“It’s a Christmas present for the city,” he said. “We won.”

You can reach News-Times reporter Jessie Stensland at jstensland@whidbeynewstimes.com or call 675-6611.

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